silk road

We’ve written on the hyperdeflation problem before. Basically, with Bitcoin prices surging, nobody wants to buy anything, you just want to hold onto your Bitcoins. Conversely, when they collapse, nobody wants to sell. So volatility means nobody wants to transact in Bitcoins, because there’s a good chance that the next day someone will feel like a fool.

At 6am this morning, I got an email from one of my sleazier contacts. It simply said "looks like Silk Road has collapsed". I fired the Tor browser you need to connect to the site and, indeed, it wasn't there.

Senator Charles Schumer is asking federal authorities to shut down a secretive narcotics market operated online with anonymous sales and untraceable currency. The website uses a complex Internet configuration that allows the users to remain anonymous and untraceable by downloading the program TOR. To make sure the money exchanged can't be traced, the site uses a new digital currency called Bitcoins.